Retail prices of coffee in the U.S., the world’s largest consumer of the product, are expected rise to soon as a resulted of transportation constraints, not production capacity, according to a report on CNBC.com.
Shipping inflation is impacting midsize and smaller roasters hardest, the report said, but even such larger companies as Peet’s and JM Smucker are grappling with higher costs.
Transportation backlogs recently drove up coffee prices to their highest level in more than a year. Roasters cited coffee shipment delays originating from Africa and South America.
Commodities like coffee, cocoa, cotton and refined sugar are usually transported in containers, while others such as soybeans, corn and raw sugar use bulk carriers.
Many U.S. business sectors relying on imports are also face shipping inflation.
S&P Global Platts, a market intelligence provider, reported: “soaring freight costs may have added $9.53 billion to corporate costs on U.S. inbound routes alone in the fourth quarter of 2020.”
